Dynegy’s treatment of creditors leading up to its bankruptcy filing was more noxious than the emissions from its coal plants. Last summer, it created a separate company to hold its coal-fired power plants — its most lucrative assets — and shield them from the bankruptcy proceeding that was, by then, imminent. That essentially transferred the assets from creditors, who ought to get first priority in bankruptcy, to shareholders, who typically wait near the end of the line.

Flexon and the rest of his management team have a lot of incentive to settle. The U.S. Trustees office, the arm of the Justice Department that monitors bankruptcy proceedings, asked the judge last month to appoint a trustee to manage the company, Bloomberg News reported. In a court filing, the trustee’s office said that the examiner’s report revealed “gross mismanagement on the part of current management.”